Tag: Too Big to Fail

A Back Door For Gutting Regulation

Cross posted from The Stars Hollow Gazette

Gaius Publius of Americablog succinctly defined one of those vague terms that we heard so often since the banking crisis began in 2007, Credit Default Swaps (CDS) :

Credit default swaps are pure casino bets. They were originally designed as a form of insurance against bond and other credit defaults (“I’ll pay you a monthly fee and you pay me my losses if these bonds default.”)

It’s a simple concept, but CDSs soon evolved. Turns out you don’t have to actually hold the bonds to insure them. This means that one guy can sit at a table with a bunch of bonds (or bundles of mortgages), while another guy can insure them. Meanwhile, at 50 other tables, 50 more guys can buy the same “insurance” on the same bonds from anyone who will sell it to them. Keep in mind, only the first guy actually holds the bonds. The other guys just know they exist.

That’s 50 side-bets on one set of bonds. Placing side-bets on someone else’s property is like betting on a ball game you’re just watching. Like I said, pure casino money.

go to site Do you see the problem? One guy’s bonds default and suddenly 51 guys in that room, everyone who sold “insurance,” they’re all wiped out. Why? Because the dirty secret of derivatives bets is that the people offering the “insurance” rarely have the money. They’re betting that they can collect “insurance” fees forever and the defaults will never come. That’s what happened with mortgage-backed bets in 2007, and that’s what’s happening today.

In 2010, the Democratic held Congress passed the Dodd-Frank Wall St. Reform and Consumer Protection Act to rein in the worst practices of the banks and Wall St. Needless to say, it is overly complicated, inadequate and has yet to be fully implemented.

That has not stopped the now Republican held House, along with some Democrats, to end some of the regulations. Less that week after Sen. Carl Levin released a scathing report on the $6.7 billion loss (pdf) of JP Morgan Chase in the infamous “London Whale” deal, the House Agriculture Committee, go figure that logic, approved seven bills that would gut regulation of the derivatives market and once again, if the banks lose, the tax payer makes good the losses. Sound familiar? Does TARP ring a bell? The housing market crash?

In his Salon article go to link David Dayen asks if JP Morgan is a farmer?

It turns out that the Agriculture Committees have held jurisdiction over derivatives since the mid-19th century, when farmers used derivatives to achieve stability over future prices. Traders still use derivatives for corn and other commodities, but the world of derivatives has grown far more sophisticated over the decades. Nevertheless, congressional committees zealously guard their jurisdictions, and so a bunch of lawmakers from rural states get to determine a major aspect of financial policy. [..]

To see how this all works, just look at the hearing on these derivatives bills, held last week. When Ag Committee chairman Frank Lucas wasn’t openly parroting industry scare tactics about energy price spikes from regulation, he called on a list of witnesses that included four industry trade group representatives and one public advocate from Americans for Financial Reform, Wallace Turbeville. (He did great (pdf).) Or for an even clearer indication, read these PowerPoint slides created for Ag Committee staff by the Coalition for Derivatives End-Users, an industry-backed lobbyist organization. This extremely one-sided perspective on the issue simply becomes the default position for committee members and their staffs, an example of the “cognitive capture” in D.C. that sidelines alternative voices. And it all happens under the radar.

One of the Democratic House members who is sponsoring these bills, is Rep. source link Jim Himes, a former Goldman Sachs vice president who represents the Connecticut bedroom communities of Wall Street traders. It’s not hard to imagine why he defended his support of these bills when asked by the press. The Democratic members of the committee who voted with the 25 Republicans to send these bills to the House floor are: http://maientertainmentlaw.com/?search=best-place-to-buy-female-viagra Pete Gallego (TX-23); http://cinziamazzamakeup.com/?x=viagra-generico-200-mg-prezzo-a-Parma Ann Kuster (NH-2); go here Sean Patrick Maloney (NY-18); follow site Mike McIntyre (NC-07); get link David Scott (GA-13); and dove comprare levitra originale 20 mg in italia Juan Vargas (CA-51).

These are the bills that were passed by the committee:

H.R. 634 (pdf), the Business Risk Mitigation and Price Stabilization Act of 2013

·       H.R. 677 (pdf), the Inter-Affiliate Swap Clarification Act

·       H.R. 742 (pdf), the Swap Data Repository and Clearinghouse Indemnification Correction Act of 2013

·       H.R. 992 (pdf), the Swaps Regulatory Improvement Act

·       H.R. 1003 (pdf), To improve consideration by the Commodity Futures Trading Commission of the costs and benefits of its regulations and orders.

·       H.R. 1038 (pdf), the Public Power Risk Management Act of 2013

·       H.R. 1256 (pdf), the Swap Jurisdiction Certainty Act

Even if these bills all get passed, they will never see the light of day in the Senate.

Sheila Bair, the longtime Republican who served as chair of the Federal Deposit Insurance Corporation (FDIC) during the fiscal meltdown five years ago, joins Bill to talk about American banks’ continuing risky and manipulative practices, their seeming immunity from prosecution, and growing anger from Congress and the public.

“I think the system’s a little bit safer, but nothing like the dramatic reforms that we really need to see to tame these large banks, and to give us a stable financial system that supports the real economy, not just trading profits of large financial institutions,” Bair tells Bill.

US Tax Payers Still Bailing Out TBTF

Cross posted from The Stars Hollow Gazette

With sequestration looming, many Americans are still struggling to recover from the the 2008 recession that cost them billions in lost savings and jobs but not the banks who were the chief perpetrators for the housing crash. As a matter of fact, American tax payers are still bailing out the “Too Big To Jail” banks $83 billion a year:

So what if we told you that, by our calculations, the largest U.S. banks aren’t really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers? [..]

Banks have a powerful incentive to get big and unwieldy. The larger they are, the more disastrous their failure would be and the more certain they can be of a government bailout in an emergency. The result is an implicit subsidy: The banks that are potentially the most dangerous can borrow at lower rates, because creditors perceive them as too big to fail. [..]

The top five banks — JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc [..] with almost $9 trillion in assets, more than half the size of the U.S. economy — other drug like clomid 50mg would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders.

It is outrageous that Americans are being bludgeoned with $85 billion in austerity cuts that will most likely halt any recovery while handing banking shareholders an $83 billion gift.

During his appearance before the Senate Banking Committee, Federal Reserve Chairman Ben Bernanke was asked by freshman Sen. Elizabeth Warren about about the risks and fairness of having banks that are “too big to fail

Warren quizzed Bernanke on that study. “I understand that we’re all trying to get to the end of too big to fail, but my question, Mr. Chairman, is until we do, should those biggest financial institutions be repaying the American taxpayer that $83 billion subsidy that they’re getting?”

Bernanke responded, “The subsidy is coming because of market expectations that the government would bail out these firms if they failed. Those expectations are incorrect.”

After some back and forth, Warren countered, “$83 billion says there really will be a bailout for the largest institutions.”

“That’s the expectation of markets. But that doesn’t mean we have to do it,” Bernanke responded.

Warren insisted that the large banks should pay for the subsidy. “Ordinary folks pay for homeowners’ insurance, ordinary folks pay for car insurance, and these big financial institutions are getting cheaper borrowing to the tune of $83 billion in a single year simply because people believe that the government would step in and bail them out. I’m just saying, if they’re getting it, why shouldn’t they pay for it?” she said.

“I think we should get rid of it,” Bernanke said. He said he agreed with her that government should address the problem of “too big to fail.”

Meanwhile, as Chris in Paris at AMERICAblog points out these banking executives are the forefront of the attack on the social safety net:

You may recall Goldman Sachs CEO Lloyd Blankfein, the guy who Obama has a strange bromance with, adjusted bonus payout dates in both the US and UK to avoid paying taxes. You know, as in the taxes that saved his entire lifestyle.

Even worse is Blankfein’s insistence on bashing programs that are critical to middle class Americans. It’s the Blankfeins of the world that want to take your Medicare and Social Security away.  God forbid we ran out of money and there weren’t any left to bail out the banks next time, right?

Then there’s my other favorite bankster, good old Jamie Dimon of JPMorgan. Dimon is the delightful fellow who ignored the warnings and ended up costing the bank, and our taxpayers, billions.

Since these banks really aren’t turning a profit without government welfare, what would JPMorgan look like without those handouts? For Dimon, banking rules that help protect taxpayers from bailing out the gambling banks are “un-American.”

The major bank chiefs have been quite vocal about trashing the social system, just as they trashed our economy. But when it comes to helping Americans, the banks have little interest beyond their next bailout.

Speaking of Jamie, our favorite vampire capitalist, “thoughtfully” explained why he’s richer than anyone else” in this exchange with Mike Mayo, an analyst at CLSA and Dimon critic:

Mayo: I think what I hear UBS saying in the presentation is that if I’m an affluent customer I’ll feel a lot better going to UBS if they have 13.5 (percent) capital ratio than another big bank with a 10 percent ratio. Do you agree with that?

Dimon: You would go to UBS and not JPMorgan?

Mayo: I didn’t say that. That’s their argument.

Dimon: propecia generic That’s why I’m richer than you. [..]

FDL New Desk‘s DSWright found Dimon’s response arrogant but indicative of something even more offensive:

Dimon is right, he did get rich having low capital ratios – which is why his form of banking is dangerous. It’s the precise reason the banks could not protect themselves during the crisis, they were over-leveraged.

   “The real issue isn’t who is rich, but rather whose interests are being fairly served and whose aren’t. Dimon’s approach gives short shrift to both shareholders and taxpayers. Taxpayers still carry substantial risks for which they are not being compensated, a state that will only change when regulations are tightened, and hopefully vastly simplified.

   Shareholders do badly because the kind of bank Dimon runs is prone to loss and volatility, leading markets to set a low value on the bank’s earnings.”

Mathematician Albert Einstein said that doing the same thing over and over expecting different results was the definition of insanity. Continuing to bail out these banks on tax payer’s “dime” when there is no evidence that breaking them up would harm the economy is just insane.

Still Bailing Out the Banks

Cross posted from The Stars Hollow Gazette

Nearly a year ago Rolling Stone contributing editor, Matt Taibbi wrote about how the Bank of America had defrauded everyone yet the US government kept bailing it out. They got a slap on the wrist and a paltry $$137 million fine for bilking needy schools and cities all the while plotting to rig global interest rates. In that same article from March 29th, 2012, Matt noted that BoA was still failing, yet they were still being bailed out. Why? The government’s excuse then and still is that they are too big to fail and too big too jail.

This was not fixed by Dodd-Frank and the promise to investigate the mortgage fraud and hold the banks accountable for bringing down the housing market and the economy along with it never materialize.

On Saturday in her New York Times article Gretchen Morgenson revealed that, we, the American taxpayer, are still bailing out Bank of America in secret deals :

That the New York Fed would shower favors on a big financial institution may not surprise. It has long shielded large banks from assertive regulation and increased capital requirements.

Still, last week’s details of the undisclosed settlement between the New York Fed and Bank of America are remarkable. Not only do the filings show the New York Fed helping to thwart another institution’s fraud case against the bank, they also reveal that the New York Fed agreed to give away what may be billions of dollars in potential legal claims.

Here’s the skinny: Late last Wednesday, the New York Fed said in a court filing that in July it had released Bank of America from all legal claims arising from losses in some mortgage-backed securities the Fed received when the government bailed out the American International Group in 2008. One surprise in the filing, which was part of a case brought by A.I.G., was that the New York Fed let Bank of America off the hook even as A.I.G. was seeking to recover $7 billion in losses on those very mortgage securities.

It gets better.

What did the New York Fed get from Bank of America in this settlement? Some $43 million, it seems, from a small dispute the New York Fed had with the bank on two of the mortgage securities. At the same time, and for no compensation, it released Bank of America from all other legal claims.

[…] To anyone interested in holding banks accountable for mortgage improprieties, the Fed’s actions are bewildering. If the Fed intended that Maiden Lane II own the right to sue Bank of America for fraud, why didn’t it pursue such a potentially rich claim on behalf of taxpayers? The Fed made $2.8 billion on the Maiden Lane II deal, but the recovery from Bank of America could have been much greater. Why did it instead release Bank of America from these liabilities and supply declarations that seem to support the bank in its case against A.I.G.?

The New York Fed would not discuss this matter, citing the litigation. But taxpayers, who might have benefited had the New York Fed brought fraud claims, deserve answers to these questions.

[…] A New York Fed spokesman said it supported the settlement because it would generate significant value without potentially high litigation costs.

Let’s recap: For zero compensation, the New York Fed released Bank of America from what may be sizable legal claims, knowing that A.I.G. was trying to recover on those claims.

If they’re too big to fail, to big to jail then these banks should be too big to exist.

The “Untouchable ” Banks (Up Date)

Cross posted by The Stars Hollow Gazette

“Too big to fail” now according to the Justice Department, “too big to jail.” The PBS news series, Frontline “investigates why Wall Street’s leaders have escaped prosecution for any fraud related to the sale of bad mortgages” in its presentation of “The Untouchables.”

Transcript can be read here

Phil Angelides: Enforcement of Wall St. is “Woefully Broken”

Phil Angelides was chairman of the Financial Crisis Inquiry Commission, which was created by Congress in 2009 to investigate the causes of the crisis. In its report, submitted in January 2011, the commission concluded that the crisis was avoidable, a result of excessive risk taking, failures of regulation and poorly prepared government leaders. This is the edited transcript of an interview conducted on Oct. 11, 2012.

Lanny Breuer: Financial Fraud Has Not Gone Unpunished

Lanny Breuer serves as assistant attorney general for the Department of Justice’s Criminal Division. He told FRONTLINE that when fraud from the financial crisis has been detected, the Department of Justice has pursued charges. “But when we cannot prove beyond a reasonable doubt that there was criminal intent, then we have a constitutional duty not to bring those cases,” Breuer said. This is the edited transcript of an interview conducted on Nov. 30, 2012.

Too Big To Jail? The Top 10 Civil Cases Against the Banks

by Jason M. Breslow

The Justice Department’s initial response to the financial crisis did not take long to materialize. In June 2008, three months before the Lehman Brothers collapse, the department brought its first criminal case, charging two former Bear Stearns executives with securities fraud for their alleged roles inflating the housing bubble.

A little more than a year later, a jury found the executives not guilty, dealing the DOJ an early setback. Since then, government investigations into the crisis have almost exclusively centered on civil charges, which requires prosecutors establish guilt beyond a preponderance of the evidence. The bar is higher in criminal cases, requiring they prove guilt beyond a reasonable doubt.

Here are 10 of the most prominent of those cases to date. In nearly all, the government won multi-million dollar settlements, but the companies and officials involved were not required to admit wrongdoing.

Secrets and Lies of the Bailout

by Matt Taibbi

The federal rescue of Wall Street didn’t fix the economy – it created a permanent bailout state based on a Ponzi-like confidence scheme. And the worst may be yet to come

It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you’d think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we’ve been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?

Wrong.

It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.

Up Date: After his appearance on “Frontline”, Yves Smith at naked capitalism delightedly announced the news that Lanny Breuer, former Covington & Burling partner and more recently head of the criminal division at the Department of Justice, had his resignation leaked today.

Never mind resign, why hasn’t Obama fired him?

Subterranean Serfdom Blues

too_big

     Bankers in the basement,            

     Mixing up the medicine,

     I’m on the pavement,

     Thinking about the government.

     The pols in the empty suits,

     Acolytes of Abramoff,

     Say we got a deficit,

     Want to get it paid off.

     Look out kid,

     It’s something you did,

     God knows when,

     But you’re a parasite again.

     Better blink away the pepper spray,

     Duck back down the alley way,

     Your job creator master,

     To pay for his disaster,

     Wants ninety dollar bills,

     You only got ten.

     Obama comes fleet foot,

     Asking for our input,

     Talking ’bout transparency,

     Freedom and democracy,

     But taps our phones anyway,

     Get used to it, ’cause many say,

     They must watch us every day,

     Orders from the NSA.

     Look out kid.

     Look out, look out, look out.

“Breaking Up Is Hard To Do”

Cross posted from The Stars Hollow Gazette

In 1998, then Citigroup Chairman and CEO Sanford “Sandy” Weill orchestrated the merger of Travelers Group and Citibank in what was, at the time, considered the largest merger in history. The merger was technically illegal because still in existence was a law known as Glass-Steagall,  a 66-year-old law that had separated commercial banking from investment banking. That merger and the repeal of the  Glass-Steagall Act in 1999, Mr. Weill now says were a mistake. He made this stunning pronouncement on CNBC’s “Squawk Box.”

“What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail,” Weill told CNBC’s “Squawk Box.”

He added: “If they want to hedge what they’re doing with their investments, let them do it in a way that’s going to be mark-to-market so they’re never going to be hit.”

He essentially called for the return of the Glass-Steagall Act, which imposed banking reforms that split banks from other financial institutions such as insurance companies.

“I’m suggesting that they be broken up so that the taxpayer will never be at risk, the depositors won’t be at risk, the leverage of the banks will be something reasonable, and the investment banks can do trading, they’re not subject to a Volker rule (the Volcker rule explained), they can make some mistakes, but they’ll have everything that clears with each other every single night so they can be mark-to-market,” Weill said.

Some of the reactions to Mr. Weill’s about face were not so kind, feeling that this took a lot of “chutzpah” on his part as the prime architect at shattering Glass – Steagall,  “helping create monstrously large institutions that appear impossible to regulate, manage and, in recent years, value

{..}This is rich coming from the man who hung a portrait with the words “The Shatterer of Glass-Steagall” in his office. Nor did he shoulder any of the blame for creating a mega-bank that stumbled from crisis to crisis before sucking down a $45 billion taxpayer bailout.

Such chutzpah may make his message easy to dismiss. But the point has been resonating for a while across the political spectrum. For critics like Paul Krugman, smaller financial institutions would wield far less political influence. Others lament that the financial reforms of the Dodd-Frank Act don’t do enough to protect the financial system from another calamity. Meanwhile, some conservatives are starting to think that a more radical split might be preferable to the mess of new regulations coming down the pike, such as the Volcker Rule.

As Charles Gasparino, Fox Business News contributor, formerly with CNBC, and author of “The Sellout“, observed:

It’s a shame it took mountains of sleaze, tremendous shareholder losses, a financial crisis and taxpayer bailouts for Weill to see the light because there are many valid reasons to break up the banks. We had a financial crisis (and subsequent taxpayer bailouts) largely because of enormous risk taking at the mega-banks like Citigroup, which led others to blindly copy the firm’s risk taking model until the entire system blew up in the fall of 2008.

Even so, it’s hard to take Weill seriously. First this is a man with an ego the size of the bank he created. People who know him say he needs media attention like an alcoholic needs a stiff drink, and he’s gotten precious little of it since retiring from the banking business six years ago. Yesterday made him feel like the same old Sandy again.

Then there’s his record as a banker, which should banish him from ever dispensing advice on the business he helped destroy.

Over at naked capitalism, Yves Smith sees the real significance of the Weill’s flip a bit differently:

It’s a reminder that talk of reform is cheap and without consequence. Would any of these former Big Names who would love to be hauled out of mothballs (ex John Reed, who never liked the limelight and I believe in genuine) be serious about advocating change if they thought it really might happen? This isn’t a sign of a break in the elites, this is at best pandering to the 99%, or adopting a faux provocative position to get some media play. Look at how the British regulators, who have been at least willing to talk tough about banking and pushed hard for a full split between depositaries and trading firms, are in deer in the headlights mode over the Libor scandal. This isn’t just being caught out at having missed a big one; there is an astonishing inability to leverage what should be seen as a God-given opportunity to put reform back on the front burner.

When I see someone like Weill or Dick Parsons putting a big chunk of their ill-gotten gains to fund lobbying or a think tank promoting tough-minded financial services reform, I’ll give the backers their due for making a sincere and serious effort to undo the considerable damage they have done. But absent that, this career death-bed conversion is a hollow and insulting gesture.

Yes, breaking up these big banks that are too hard to regulate is the right thing to do but I suspect, damn near impossible unless it all comes crashing down taking the banksters with it.

LIBOR: There Will Be No Prosecutions

Cross posted from The Stars Hollow Gazette

LIBOR If you think for that the Justice Department in this administration is going to prosecute or regulate any of the people who were involved in the LIBOR scandal, erase that thought. Regardless of any evidence the government may have now or in the future that would send the average trader to prison for life, the main goal for Attorney General Eric Holder is to protect the banksters from prosecution. There was no reason to give immunity from prosecution of the Commodities Exchange Act. Since the government already had the e-mails, they had enough to issue subpoenas and arrest warrants. Instead, Holder’s office gave them immunity from prosecution:

A crucial element in any prosecution is criminal intent, and it’s plain from the Barclays e-mails that various participants knew that what they were doing was wrong. As one Barclays trader put it in e-mails to traders at other banks, “don’t talk about it too much,” “don’t make any noise about it please” and “this can backfire against us.”

Faced with what would seem to be an open-and-shut case, how did the Justice Department proceed? Barclays entered into a nonprosecution agreement in which the United States government agreed not to prosecute Barclays as long as it met its other obligations under the agreement, including continued cooperation in what the government said was an investigation still under way. Barclays also received a conditional grant of immunity from the antitrust division. [..]

The United States government “had the smoking guns,” Professor (John C.) Coffee said, and “it could have demanded its price from Barclays,” including a guilty plea to a crime. At the same time, the agreement “isn’t surprising,” he said. “The Department of Justice has done this in almost every major case since the collapse of Arthur Andersen.” (Andersen was the accounting firm indicted after the collapse of Enron.)

Glen Ford nails precisely why there will be no prosecutions, since the ultimate aim is “protecting the banks from the consequences of their crimes:”

“The reason Eric Holder is staging criminal investigations is because that’s the only way he can protect the bankers, through immunities and by gradually narrowing the scope of the case.”

The Obama Justice Department is in theater mode, again, pretending to threaten the bankster class with criminal penalties – prison time! – for their manipulation of the global economy’s benchmark interest rates. The Justice Department claims to be building criminal and civil cases in the LIBOR scandal, which in sheer scope is the biggest fraud by international capital in history. But that’s all a front, a farce. Barack Obama has spent his entire presidency protecting Wall Street, starting with his rescue of George Bush’s bank bailout bill after it’s initial defeat in Congress, in the last days of Obama’s candidacy. He packed his administration with banksters, passed his own bailout and, in collaboration with the Federal Reserve, channeled at least $16 trillion dollars into the accounts of U.S. and even European banks – by far the greatest transfer of capital in the history of the world. Obama has reminded the banksters that it was he who saved them from the “pitchforks” of an outraged public. He pushed through Congress so-called financial reform legislation that left derivatives – the deadly instruments of mass financial destruction that were at the heart of the meltdown – untouched. [..]

Now Obama and Holder are playing the same diversionary game, making tough noises about criminal investigations of the LIBOR conspirators. But the Justice Department has already given immunity to Barclay’s Bank, of Britain, and to the Swiss banking giant UBS. More immunities will follow. The reason Eric Holder is staging criminal investigations is because that’s the only way he can protect the bankers, through immunities and by gradually narrowing the scope of the case. In the end, there will be settlements all around, and the banksters will move on to even more fantastic heights of criminality – thanks to the loyal, protective hands of President Obama.

Prosecutions? Don’t hold you breath.

Arrrrrghhh !!!

As Lieberman deliberated, the new chair of the Democratic Senatorial Campaign Committee, Sen. Patty Murray (D-Wash.), told HuffPost that the party would consider supporting Lieberman if he returned to the fold.

http://www.huffingtonpost.com/…

Joe Lieberman,Senator Joe Lieberman

Joe & George the President


The feeling of ill will is mutual: Lieberman said during the health care debate that one reason he opposed a Medicare buy-in compromise was that progressives were embracing it.

Joe Lieberman and John McCain

Joe & John the Presidential Candidate




March 20, 2003

” What we are doing here is not only in the interest of the safety of the American people. Believe me, Saddam Hussein would have used these weapons against us eventually or given them to terrorists who would have. But what we are doing here, in overthrowing Saddam and removing those weapons of mass destruction and taking them into our control, is good for the security of people all over the world, including the Iraqi people themselves.”

http://www.lobelog.com/lieberm…

John McCain Joe Lieberman,McCain,Lieberman

Joe and John in Iraq


September 29, 2011.    10 years and 18 days after 9-11 attacks on NYC



” It is time for us to take steps that make clear that if diplomatic and economic strategies continue to fail to change Iran’s nuclear policies, a military strike is not just a remote possibility in the abstract, but a real and credible alternative policy that we and our allies are ready to exercise.

It is time to retire our ambiguous mantra about all options remaining on the table. It is time for our message to our friends and enemies in the region to become clearer: namely, that we will prevent Iran from acquiring a nuclear weapons capability — by peaceful means if we possibly can, but with military force if we absolutely must. A military strike against Iran’s nuclear facilities entails risks and costs, but I am convinced that the risks and costs of allowing Iran to obtain a nuclear weapons capability are much greater.

Some have suggested that we should simply learn to live with a nuclear Iran and pledge to contain it. In my judgment, that would be a grave mistake. As one Arab leader I recently spoke with pointed out, how could anyone count on the United States to go to war to defend them against a nuclear-armed Iran, if we were unwilling to go to war to prevent a nuclear-armed Iran? Having tried and failed to stop Iran’s nuclear breakout, our country would be a poor position to contain its consequences.

I also believe it would be a failure of U.S. leadership if this situation reaches the point where the Israelis decide to attempt a unilateral strike on Iran. If military action must come, the United States is in the strongest position to confront Iran and manage the regional consequences. This is not a responsibility we should outsource. We can and should coordinate with our many allies who share our interest in stopping a nuclear Iran, but we cannot delegate our global responsibilities to them.”

http://www.lobelog.com/lieberm…

http://lieberman.senate.gov/in…

Staying “Too Big to Fail” is a business strategy.

The “too-big-to-fail” banks brought the world economy within hours of utter collapse in September 2008 through a chain reaction of insolvency and counter-party risk.  The fuse was lit, only to be serially and temporarily retarded by massive government infusions of taxpayer money approximating the size of our entire GDP.  A prudent response would have been to dismantle any risk-taking institution that might be considered to be “too big to fail” in any future scenario, to create a more distributed (not all eggs in one basket), and more robust system that could easily withstand isolated failures.  This was not done.  In fact, just the opposite occurred.  The banks took the massive infusions of cash and became even  fewer, bigger, and more prone to systemic failure.

Goldman Sachs:

“We consider our size an asset that we try hard to preserve.”

Or as Lloyd Blankfein might say: We embiggen ourselves!  

Simon Johnson explains the “logic” and purpose of becoming “even bigger and failer” after the first near total collapse of the global economy:

As John Cochrane, a University of Chicago professor and frequent contributor to the Wall Street Journal puts it, “The incentive for the banks is to be as big, as systemically dangerous as possible.”

This is how big banks ensure they will be bailed out.

Financial terrorism using the threat of a “financial weapons of mass destruction” is a feature, not a bug.  Holding Americans (and the rest of the world) hostage to financial terrorism is a feature that the Obama administration clearly supports by inviting the perpetrators of financial terrorism into key posts in the White House.  Try crashing those gates, Kos!  You might need some help from non-Democrats.

The Federal Reserve is fully committed to Wall Street, as well.  Fueling asset speculation by giving cheap (to the banks) taxpayer-backed money to the rich, while not one of its two mandates (of full employment and price stability) is now the Fed’s primary goal.  The Fed has abandoned its mandates of full employment and price stability in favor of letting the rich get richer by gambling with our money.  

This comment (from the previous link) explains the Fed’s strategy:

The Fed agenda is quite simple: fuel asset speculation in the hope of provoking a price inflation that will validate outstanding debt. Why can’t this work? Because the debt is owed by wage earners whose incomes are undermined by globalization.

Of course, as the comment implies, a lot of the speculation is being done in emerging markets overseas (draining away productive capacity and jobs at home) and in commodities, such as food and fuel, making everyday living ever more painful for 90% of us, while the lugals save their own bacon and embiggen themselves.

Don’t expect home prices to rise or even stabilize, even after 50-some-odd straight months of housing price declines.  We’re still a long way from rock bottom.  Of course, it’s not just the wage earners whose assets are impaired.  The government and all of its government-sponsored entities, including the six largest banks and Fannie and Freddie, will simply be the last to fold.

The real economy, including the surplus eaters (you and I), can literally drop dead.  Now.

Sausage WIN! Senate votes against Banksters in favor of everyone else!

On a vote to buck the Banksters and help out everybody except our financial wizards, the Senate passed the Dick Durbin Amendment to reform Debit fees with a whopping 64 votes. In even more unlikely anti bankster behavior, 17 GOP Senators voted FOR the bill.

   As of the typing of this article, hell has yet to begun to freeze.

The final vote tally was 64-33.

Voting in favor: 46 Democrats, 17 Republicans and Independent Sen. Bernie Sanders [I, VT].

Voting against: 9 Democrats, 23 Republicans and Independent Sen. Joseph Lieberman [I, CT].

   Good ole Joey Lieberman. He’s with us on everything but the war and Barack Obama.

   But this is a great win that will benefit everyone who isn’t a MegaBank or n executive or a servant of them, and a win for everyone else, but, as always, politics make strange bedfellows.

More below the fold.

WIN! Sen. Franken takes on TBTF Crooked Credit Rating agencies!

    Remember how crooked accountants like Arthur Anderson helped create the Enron disaster? Well the credit rating oligopoly of the Big Three (Moody’s, Fitch and Standard & Poor’s) is doing almost the same thing, and Senator Al Franken wants to put a stop to it.

    As Senator Franken told ABC news

    “If a failing student paid their teacher to turn their F into an A, everyone would agree that what the teacher had done was unethical … But right now, investors are being sold a phony bill of goods. We need to protect consumers from the pay-to-play system that rewards Wall Street players at the expense of Main Street.”

h/t to Kossack DDay at Firedoglake.com

   Al Franken has an Amendment to the Wall St reform bill that will bring this to an end.

More below the fold

   

F*** these Corporatist Senators and the Bankers limos they rode in on!

    I am reminded of the words of our founding father, Thomas Jefferson. 3/4ths of this Senate are not fit to polish his statue. The words this titan among men once said were . . .

    “The bank mania… is raising up a moneyed aristocracy in our country which has already set the government at defiance, and although forced at length to yield a little on this first essay of their strength, their principles are unyielded and unyielding. These have taken deep root in the hearts of that class from which our legislators are drawn, and the sop to Cerberus from fable has become history. Their principles lay hold of the good, their pelf of the bad, and thus those whom the Constitution had placed as guards to its portals, are sophisticated or suborned from their duties.”

Thomas Jefferson to Josephus B. Stuart, 1817. ME 15:112

    Cry about that, Glenn Beck!

    In the face of the defeat of the Kaufman-Brown Amendment to break up the Too Big To Fail banks, I have this to say.

source url F*** these Corporate Senators and the Bankers Limos They Rode In On!!!!

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